Tuesday, August 7, 2007

Perhaps no area represents the dichotomy between the fiscal and the neighborhood economy more than real estate. The rapid rise in housing prices over the last few years has intensified a crisis for first-time buyers and renters seeking homes they can afford. Exemplifying these contradictory forces, the sale by the Metropolitan Life Insurance Company of the 11,250 unit Stuyvesant Town-Peter Cooper Village housing complex last year was a record-setting $5.4 billion real estate transaction. Although the sale boosted city tax receipts, it also meant a significant reduction in the city's supply of middle-income housing as the new owners sought higher market prices in a climate of rapidly escalating real estate values. One particularly disturbing consequence of the city's hot real estate market may be an increase in homelessness, which is now higher than it has been since the early 1980s. Neighborhoods and the Fiscal Boom (Gotham Gazette 8/7/07)